The mood in Italy turns positive

By: James Norris | 22 Nov 2011

After the crisis that resulted in the removal of prime minister Silvio Berlusconi, press reports reflect greater confidence in the ability of Italy’s new prime minister Mario Monti to put the country on the road to recovery.

The country’s leading financial newspaper, Il Sole 24 Ore reports Olli Rehn, vice-president of the European Commissioner, saying that “the situation in Italy represents an opportunity for positive change.” His comments were widely reported in the national press, including the Corriere della Sera, Il Giorno and La Repubblica.

Rehn, speaking in Berlin, said he expects that with the right measures Italy will be able to regain the confidence of the markets. He cited the speed of political change and the solid political support received from Parliament as evidence that Italians have accepted the need for change.

Fabrizio Saccomanni, the director general of the Bank of Italy, speaking at a meeting in Paris, dismissed claims that Italy would not be able to sustain yields of more than 7%. According to the AGI newswire, he said: “Those who say that 7% is the point of no return are not correct,” adding that Italy has been in this position before.

The Bund-Btp spread has dropped below 480bps, and yields for ten-year bonds on Monday evening stood at 6.74%.

In Parliament Monti’s first measures received approval from both houses, despite opposition from the Lega Nord, the right-wing party. However, it is too early to consign Berlusconi to the history books: he remains the head of the PDL, the largest party in parliament.

The newswire ADNKronos reports Nichi Vendola, a left-wing politician, saying that Berlusconi has recovered from the shock of his removal from government and is ready to once again play a central role in the Italian political scene. So far, Berlusconi has co-operated with Monti, though the big question is for how much longer.

Monti, dubbed ‘Il Professore’, is in Brussels for meetings with the President of the EU Council of Ministers Herman Van Rompuy and President of the European Commission José Manuel Barroso. He is also due for meetings with Angela Merkel and Nicholas Sarkozy in Strasbourg. Next Tuesday, Monti will present a progress report to the Eurozone group of ministers in Brussles.